Earnings call transcript: 5N Plus Inc. beats Q2 2025 forecasts, stock rises

5N Plus Inc., a specialty semiconductor company with a market capitalization of $956 million, reported its Q2 2025 earnings, significantly surpassing expectations with an EPS of $0.17 against a forecast of $0.0825, marking a 106.06% surprise. The company’s revenue also exceeded predictions, reaching $95.3 million compared to the anticipated $83.24 million. Following the earnings release, 5N Plus Inc.’s stock saw a modest rise of 0.81%, reflecting investor optimism about the company’s performance and future prospects. InvestingPro analysis reveals an overall "GREAT" financial health score, indicating strong fundamental performance.

Key Takeaways

• 5N Plus reported a substantial earnings surprise with a 106.06% beat on EPS.
• Revenue increased by 28% year-over-year, driven by strong demand in renewable energy sectors.
• The company’s stock price increased by 0.81% post-earnings announcement.
• Adjusted EBITDA guidance was raised, indicating confidence in future growth.
• Strategic supply agreements and production expansions are set to bolster future performance.

Company Performance

5N Plus Inc. demonstrated robust performance in Q2 2025, with a 28% year-over-year increase in consolidated revenue. According to InvestingPro data, the company has maintained impressive revenue growth with a 24.2% increase in the last twelve months and a five-year compound annual growth rate of 8%. The company’s strategic focus on renewable energy and specialty semiconductors has positioned it well in the market, contributing to its strong financial results. The expansion of supply agreements and production capacity further underscores its competitive edge.

Financial Highlights

• Revenue: $95.3 million (up 28% YoY)
• Earnings per share: $0.17 (EPS surprise of 106.06%)
• Adjusted EBITDA: $24.1 million (up 79% YoY)
• Adjusted Gross Margin: $33 million (34.6% of sales)

Earnings vs. Forecast

5N Plus Inc. significantly outperformed market expectations, with actual EPS of $0.17 against a forecast of $0.0825, resulting in a 106.06% surprise. Revenue also exceeded forecasts by 14.5%, highlighting the company’s strong operational execution and market demand.

Market Reaction

Following the earnings announcement, 5N Plus Inc.’s stock price increased by 0.81%, closing at $12.57. This movement places the stock near its 52-week high, with InvestingPro data showing impressive returns of 114% over the past year and 63% in the last six months. The stock currently trades at a P/E ratio of 37x, suggesting premium valuation levels compared to historical averages. For investors seeking deeper insights, InvestingPro offers 16 additional investment tips and comprehensive valuation analysis for 5N Plus Inc.

Outlook & Guidance

The company raised its adjusted EBITDA guidance to $65-70 million, up from the previous range of $55-60 million. This revision reflects anticipated demand increases in specialty semiconductors and renewable sectors, with projected volume growth of 35-45% in 2026. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its calculated Fair Value, though strong growth prospects and analyst consensus recommendations of 1.8 (Buy) suggest continued momentum potential. 5N Plus is also pursuing M&A opportunities to further strengthen its market position.

Executive Commentary

CEO Gerard Vajac emphasized the company’s strategic positioning, stating, "We are the partner of choice outside of China for high purity, high-quality advanced materials." He also highlighted the importance of solar energy in the U.S. energy mix, adding, "America needs solar energy in the mix as it seeks to diversify its energy sources."

Risks and Challenges

• Supply Chain Disruptions: Potential delays or shortages could impact production timelines.
• Market Saturation: Increasing competition in the renewable energy sector may pressure margins.
• Macroeconomic Pressures: Global economic uncertainties could affect demand and investment.

Q&A

During the earnings call, analysts inquired about the company’s capacity expansion plans and its strategic partnership with First Solar. Management confirmed that the majority of First Solar volumes would be dedicated to U.S. production and discussed the addition of a new CDSE production line in 2026.

Full transcript - 5N Plus Inc. (VNP) Q2 2025:

Conference Operator: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the 5N Plus Inc. Second Quarter twenty twenty five Conference Call. At this time, note that all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session.

And I would like to turn the conference over to your speaker today, Richard Perron, Chief Financial Officer. Please go ahead, sir.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Good morning, everyone, and thank you for joining us our Q2 twenty twenty five results conference call and webcast. We will begin with a short presentation, followed by a question period with financial analysts. Joining me this morning is Gerard Vajac, our President and CEO. We issued our financial results yesterday and posted a short presentation on the Investors section of our website. I would like to draw your attention to slide two of this presentation.

Information in this presentation and remarks made by the speakers today will contain statements about expected future events and financial results that are forward looking and therefore subject to risks and uncertainties. A detailed description of the risk factors that may affect future results is contained in our management’s discussion and analysis of 2024, dated 02/25/2025, available on our website in our public filings. In the analysis of our quarterly results, you will note that we use and discuss certain non IFRS measures, which definitions may differ from those used by other companies. For further information, please refer to our management’s discussion and analysis. I would now turn the conference over to Xavier.

Gerard Vajac, President and CEO, 5N Plus Inc.: Thank you, Richard, and thank you all for joining us this morning. Yesterday evening, we announced record results for the 2025 and year to date across several indicators. Our performance marks several new all time highs for 5N Plus and positions us well for the remainder of the year. This includes record quarterly and first half adjusted EBITDA, record quarterly adjusted gross margin, and our strongest first half revenues in a decade. In a volatile business environment, where customers are seeking out dependable partners, 5N Plus continues to stand out.

We are the partner of choice outside of China for high purity, high quality, advanced materials. Customers appreciate the value and depth of our diversified global sourcing and manufacturing capability. Today, our reliability and supply chain are not just competitive advantages for us, they are of strategic importance for our customers. This morning, we also announced a milestone supply agreement with First Solar, which I will discuss in more detail in a moment. As we head into the second half of the year, we are not only well placed to deliver on our new increased adjusted EBITDA guidance for 2025, we will also be able to build on this momentum going into 2026.

Let’s start with our activities and strategic sectors under Specialty Semiconductors. In terrestrial renewable energy, volumes were significantly up for the second quarter compared to last year and up compared to the first quarter. We are on pace to continue shipping more products than originally planned to our key strategic customers in this sector, as reflected in the terms of our new and expanded supply agreement. Under our new terms, we are increasing semiconductor compound supply volumes by 33% for the twenty five-twenty six period underway. This is compared to initial contract levels.

As we are increasing volumes by an additional 25% over this period for the subsequent ’27 and ’28 terms. This will also include the delivery of additional next generation semiconductor compound as we continue to work with First Solar on product development. With the investment recently completed in our Germany and Montreal plant operations, we will be able to meet this increased demand with minimal additional investments. Our team is incredibly proud to solidify its standing as a critical enabler to The US solar energy sector and to further strengthen our long standing partnership with First Solar. Amid shifting US energy policy, First Solar is uniquely positioned to capitalize on US economic growth, digital infrastructure expansion and accelerating electrification as the leading American solar technology company.

Make no mistake, America needs solar energy in the mix as it seeks to diversify its energy sources, enhance its energy security and to meet significant power demand over the next decade. They need access to domestically produced reliable, scalable, cost effective and quick to market solutions. First Solar provides all those things. And they are currently actively expanding their US nameplate capacity to meet the moment. With the US administration’s Big Beautiful Bill Act, and despite the phase out of the Inflation Reduction Act anticipated in 2026, domestic solar energy will remain a part of The US energy equation.

The why and how may have evolved, but the fundamentals remain. In this context, 5N Plus is also benefiting as a key strategic North American supplier embedded in First Solar’s value chain, and as reinforced by our expanded supply agreement. Turning now to Space Power and our activities at Asylum in Germany. Demand for our solar cell technology remains very strong, further driving our performance in the second quarter, including pricing margins. Customers are planning ahead and securing products early to support future satellite programs and space missions.

To illustrate, we recently submitted a quote for deliveries extending into 2029, 2030 and 02/1931. This highlights both the long term visibility the sector provides and customer confidence in the reliability of our technology. After increasing capacity in Ibram by 35% last year, we continue to boost solar cell production by an additional 30% this year. All equipment, including two new reactors, has been installed and commissioned. We are currently ramping up production while optimizing the full value chain.

We remain on schedule to reach our full production target by Q4 twenty twenty five. Looking now at energy storage. A few weeks back, our customer Australia based Regent announced the acquisition of its Yandari project by AGL, a project which has been granted development approval. This acquisition marks a major step towards the industrialization and commercial development of long duration storage technology. As the supplier who supplied the solar cells that form the foundation of Reagent’s core module technology, this announcement bodes well for us as a commercial opportunity in the medium term.

When that time comes, we will be ready and able to deliver on Regen’s global pipeline of projects, including Lia Nari, which will have a total of 150 MW of solar energy capacity once operational. Finally, on the Performance Materials side, we are benefiting from exceptional margins, and this is no accident. In Q2, this segment was positively impacted by a favorable sales mix, despite slightly lower volumes over last year. This, once again, reflects our unique positioning in the context of high business volatility, with a strategic and diversified global supply chain. In conclusion, we have many tools in our toolbox to continue capturing market share and the growing demand in key sectors for our advanced materials.

We have the capacity to grow organically, thanks to our flexible manufacturing footprint, while we also continue to actively pursue external opportunities from a strong financial position. Thanks to our market leadership and competitive advantages, we will continue to solidify our status as the strategic partner of choice. Richard, over to you for a review of our financial results in more detail.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Thank you, Jovan, and good morning everyone. Strong financial results across the board in Q2 twenty twenty five and year to date reflect significant volume increases in specialty semiconductors, on the back of accelerating demand in strategic sectors, and exceptional margin expansion on the Performance Materials. In an environment of ongoing global trade and economic volatility, our customers are acting decisively to secure the advanced materials they require, and we are delivering. We have the right expertise to supply high purity, high quality products, as well as diverse sourcing and manufacturing capabilities customers can depend on. And this is translating into sustained outperformance since the beginning of the year.

To illustrate, consolidated revenue in Q2 increased by 28%, reaching $95,300,000 while revenue year to date reached $184,200,000 representing a 37% growth year over year and a ten year high in terms of first half revenue generation for 5N Plus. Adjusted EBITDA increased by 79% to a record $24,100,000 in Q2 and grew to a record $44,900,000 year to date and a 78% increase compared to year to date 2024. For Q2, we also delivered a record adjusted gross margin, both in terms of dollars and as a percentage of sales. In dollars, adjusted gross margin increased by 41% to $33,000,000 and came in at 34.6% of sales. Adjusted gross margin through the 2025 came in at $63,400,000 and $34,400,000 of sales.

Turning now to our segments and the drivers behind the outstanding KPI performance, starting with Specialty Semiconductors. Q2 volumes in terrestrial renewable energy were up 50% year over year and 15% compared to Q1. Our new agreement with First Solar, announced this morning, only further confirms that this acceleration in demand is not a question of timing or pull forward, but really a step up in demand that is sustained and that will continue to grow over the next few years. Q2 segment performance was further supported by high demand for solar cells, which is also positively impacting pricing margins as we progressively benefit from our capacity expansion at TESER. Meanwhile, imaging and sensing performance was on plan and as expected.

Specialty Semiconductors revenue was $71,200,000 compared to $52,300,000 in Q2 last year. Year to date, revenue was $134,000,000 compared to $97,500,000 in 2024, supported by this higher demand. Adjusted gross margin as a percentage of sales was 32.7% in Q2 compared to 33% in Q2 of last year. Year to date, it was 33.8% compared to 31.2% year to date, favorably impacted by economies of scale due to higher production and higher prices net of inflation. Adjusted EBITDA increased by $5,900,000 or 45% to reach $19,000,000 for Q2, and adjusted EBITDA year to date increased by $14,000,000 to $36,700,000 The increase is primarily attributable to higher demand, higher prices net of inflation and favorable unit costs from economies of scale.

For its part, our Performance Materials segment performance was positively impacted by favorable sales mix. This is despite slightly lower volumes over last year and the absence of the pull forward in purchasing experienced in Q1. Our ability to supply bismuth based products for industrial applications at higher margins, in the context of high business volatility, speaks to our unique, strategic and diversified global supply chain. Performance Materials revenue reached $24,100,000 in Q2 compared to $22,000,000 in Q2 of last year. Year to date, revenue was 50,200,000.0 compared to 42,100,000.0 last year.

Adjusted gross margin as a percentage of sales was a record 41.1% in Q2 this year compared to 28.4% in Q2 last year, and 36.8% for year to date compared to 31.7% last year. We had a favorable inventory position going into the quarter, from which we benefited on top of a favorable product mix and higher prices net of inflation. Adjusted EBITDA in Q2 increased by $4,200,000 or 108% and reached $8,000,000 Adjusted EBITDA year to date increased by $5,300,000 to $14,100,000 positively impacted by the same factors. Turning now to backlog. Backlog for specialty semiconductors was three fifty four days of annualized revenue, seventeen days higher than on 03/31/2025.

While the estimated number of days based on annualized revenue cannot exceed two sixty five days per hour backlog definition, the effective backlog for the terrestrial renewable energy and space solar power sectors specifically continues to surpass the next twelve months. Backlog for Performance Materials was 127, twenty five days higher than on March. Combined backlog at Q2 was two ninety seven days of annualized revenue, twenty nine days higher than on March. We also ended the quarter in a strong financial position with net debt at the low level of $74,300,000 This is compared to $100,100,000 as of the December 2024, representing a decrease of $25,700,000 That brings our net debt to EBITDA ratio to a 1.07 times as at 06/30/2025. Our strong balance sheet, coupled with our borrowing capacity, continues to provide us with financial flexibility to execute on internal or external growth opportunities.

We continue to actively assess opportunities, and the team is very much motivated to enter 2026 with an acquisition. However, we will take the time required to find the right opportunity that meet our criteria. We are pursuing these opportunities while remaining highly focused on our increased capacity targets and production optimization to meet anticipated demand. Turning now to outlook and the adjusted EBITDA guidance. Through the second half of twenty twenty five, we anticipate demand under specialty semiconductors from the terrestrial renewable energy and space solar power markets to increase further as customers look to secure high quality advanced materials from trusted partners.

Under Performance Materials, consistent with historical trends, volumes through the second half are expected to be slightly lower than in the first half, but with margins continuing to benefit from a strategic global supply chain. Based on our financial performance year to date and our expectations for the 2025, we have increased our adjusted EBITDA guidance from a range of 55,000,000 to 60,000,000 to a new range of $65,000,000 to $70,000,000 This revised guidance takes into account the increased volumes anticipated through the end of this year as a result of our new contract with Versoire. Looking ahead, we are excited about the growth opportunities ahead, but also remain very prudent and mindful of the evolving geopolitical and trade environment. We’re keeping a close eye on any impact on operating costs and focused on supporting our clients. All in all, given our unique and global standing as a preferred partner, we are well positioned for the rest of the year, but we will also capitalize on our strong momentum to enter 2026 at higher levels.

We will continue to raise the bar as we have done consistently over the last few years and keep the momentum going. So that concludes our formal remarks. I will now turn the call back over to the operator for the Q and A with financial analysts.

Conference Operator: Thank you. And your first question will be from Michael Doumet at National Bank Financial. Please go ahead, Michael.

Michael Doumet, Financial Analyst, National Bank Financial: Hey, good morning, guys. Good morning. On the quarter and obviously the First Solar contract expansion and extension. So maybe I’ll start on latter piece. So on the contract, would you be able to provide some details around just pricing in general?

And I know Jean Valet said minimal CapEx, but if you can get a little bit more specific on that, that’d be great. And then also, I guess separately, any way you can comment on whether or not you expect the delivery there to extend much beyond the first solar US production as well just to get a general view?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Okay, as a starting point, by default, the vast majority of the volume secured by that contract will be adding to The US, The United States. So there are various plants that they have in The US as a starting point. Then to answer the CapEx part, we have already in this year’s budget, capital allocated to meet the current year’s demand. And we have launched another program in order to meet next year and the following two years demand. All of that is on its way and those capital investments will be done for the most part, but not exclusively for the most part in Montreal.

So that’s all undergoing. And from the other part of your question was pricing. So pricing, it’s on favorable terms. But at the same time, remember our last remarks, we’re extremely mindful of inflation and operating costs that will most likely not stay at the current level, but all has to be to see.

Gerard Vajac, President and CEO, 5N Plus Inc.: And maybe just to add, it will all happen within our own installation, both in Eisen and Montreal, need to build a new building, it will be happening within the same installation. And we keep the same strategy, securing contracts first and then adding capacity in an incremental manner.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: We’re extremely disciplined when it comes to capital investments.

Michael Doumet, Financial Analyst, National Bank Financial: Perfect. Thank you. So maybe turning to the results, like obviously a very strong first half. If I tell you to go back to the beginning of the year and compare your early year expectations, the results so far, I wonder your view, what really exceeded the expectations? And I guess separately, the expanded agreement with Forsola already provided a boost to the first half?

Or is that really just expected to start going into the second half and into ’twenty six?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: The last part of your question, with this morning’s announcements, what we need to say is that in the first half, part of that is already realized.

Gerard Vajac, President and CEO, 5N Plus Inc.: Okay.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Okay, it’s what we refer to in the past as our spot business, not being confirmed or contracted. That’s essentially what’s behind today’s announcement and more as you can see it goes four years ahead The other part of your question was on where the performance is. Compared to the beginning, expectations. So I guess our biggest single positive impact in the year would be on the Performance Materials.

It does perform better than anticipated, okay, from a margin perspective. And obviously, we did not at the beginning of the year anticipated the pull forward in Q1. But as we’ve just mentioned, it did not appear in Q2. But the margins that we’re currently realizing on the performance materials, that’s a nice, that’s a nice, let’s say, surprise or a factor that we did not anticipate at the beginning of the year. We always anticipate good results from that segment, but the results are better than anticipated, we have to be honest.

Michael Doumet, Financial Analyst, National Bank Financial: Perfect. And maybe if I can end with a third, but I noticed you didn’t characterize the strength in your Q2 sales as benefiting from any pull forward like you did for Q1. So if I take your comments on the accelerating demand in special semiconductors, obviously, including for solar and the expansion at Mezure. Like in my mind, like how is it not possible that the Q2 sorry, the second half sales don’t exceed the first half sales? Just trying to really square away the guide with some of the commentary.

Gerard Vajac, President and CEO, 5N Plus Inc.: Well, in the case of renewable energy, we what was the spot sales in Q1 will be under contract and will increase gradually over the year to be ready to be at the level of 2026 and so on after. Then what we see is an improvement on renewable terrestrial energy. On space solar, you you will see an increase going forward as we completed the commissioning and now we’re doing all the qualification and ramping up the production. Then, you know, at Azure, production will gradually increase over the year as well. And on performance materials, as you know, we have enough capacity to meet all the demand, but the volume is slightly down, but margin up.

Then we’ll see how the market will react over the next two quarters.

Michael Doumet, Financial Analyst, National Bank Financial: I’ll leave it there, guys. Obviously, again.

Conference Operator: Thank you. Next question will be from Nicholas Boychak at Cormark Securities. Please go ahead, Nicholas.

Nicholas Boychak, Financial Analyst, Cormark Securities: Thanks. Good morning, guys.

Gerard Vajac, President and CEO, 5N Plus Inc.: Good morning.

Nicholas Boychak, Financial Analyst, Cormark Securities: On the first solar contract, can you just kind of qualify? Richard, you mentioned that a lot of the new material you’re producing is going to be going to The U. S. But does this incremental capacity account for all of the new facilities they have coming online there or might there be additional demand that they have as these other facilities like Louisiana and Alabama fully ramped to production?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Well, our understanding from discussion with them, and also their own public filings, their strategy forward is to increase further their capacity in The US when I say further further from what they may have announced a couple of years back when they officially announced the Alabama and Louisiana plant. Now they want to bring to a higher level that capacity they have in The US.

Nicholas Boychak, Financial Analyst, Cormark Securities: Okay, but to confirm, you guys know if what you are producing represents all of the CDTE and all of the advanced materials that are going into those facilities or?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: That’s our understanding. Yep, it’s not all of it. It’s by far the vast majority of all this, the semiconductor compounds they’re going to be using in their TinFim technology.

Nicholas Boychak, Financial Analyst, Cormark Securities: Yep. Okay. Understood. Thank you. Then Sorry.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Just to quickly add in this morning’s announcements, have you read we’re also adding another TinFim materials referred to as CBSE.

Nicholas Boychak, Financial Analyst, Cormark Securities: Yep. Exactly. Was just going to ask the CVSE. Could you comment at all on where that’s going to be produced and the expected volumes? The type of product it’s going to be going into any color there?

Gerard Vajac, President and CEO, 5N Plus Inc.: It’s going to be produced in Montreal, then we’re currently we will be investing in Montreal to put in place a new production line producing CDSE. And this will it it is part of the different semiconductor compound layers when you’re producing a panel at a Tintem solar panel at First Solar. You do have one one layer of CDSE. Then this will be produced in Montreal.

Nicholas Boychak, Financial Analyst, Cormark Securities: Okay. Understood. And then switching gears to Azure and the capacity demand you have there. It’s remarkable it’s that you’re booking business as far

Richard Perron, Chief Financial Officer, 5N Plus Inc.: as you are. How are you

Nicholas Boychak, Financial Analyst, Cormark Securities: guys thinking about capacity there? What would you have to see, I guess, to increase further production run rate what would catalyze that?

Gerard Vajac, President and CEO, 5N Plus Inc.: Well, as you know, 25 is fully sold, 26 is fully sold. Now we’re booking 27 and onwards. And the way it works for us, the same strategy will apply as soon as the booking will be when we have super good visibility and we know that we will be lacking capacity, we will be looking at projects to add capacity again. But again, it will be one step at a time and in an incremental manner, always the same strategy, securing contracts and then investing.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: So we essentially have a whole list of options prepared. And as we’re filling up those years, we’ll come a point in time we’ll make the call.

Nicholas Boychak, Financial Analyst, Cormark Securities: Okay. Understood. Thank you, guys.

Conference Operator: Thank you. Next question will be from Frederic Tremblay at Desjardins. Please go ahead, Frederic.

Frederic Tremblay, Financial Analyst, Desjardins: Thank you, and congrats on the quarter and the new agreement with First Solar.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Thanks, Zach.

Frederic Tremblay, Financial Analyst, Desjardins: Just on the the Frisor agreement, can you help us maybe understand how the the incremental volume, the the increase that you announced at 33%, how that’s gonna be distributed roughly over 2025 and 2026? Is that should we think about it as as an increase in both years, or is it mainly, you know, weighted to 2026?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Well, the the way we have made our announcement, we’ve compared the 2526 versus that previous contract that we had announced a year ago. So you got a first increase, whereby default 2026 has higher volume than ’25. Then when you get into ’27 and ’28, the increase we have announced is against 2526. In this case, at this point in time, the two years should be pretty much at the same level. But for the first two years, the second year being 2026 would be at a higher level than this year.

Frederic Tremblay, Financial Analyst, Desjardins: Okay, thanks for that. That’s helpful. And then maybe just switching to Performance Materials and trying to better understand the elevated margins there. Is it I mean, you’re talking about bismuth based pricing. Is it mainly just a pass through of the higher bismuth prices that we’re seeing in the market right now that’s sort of helping the operating leverage and the margin there, or is there something else that’s, you know, driving that margin higher?

I’m just trying to better get a better grasp of of the sustainability of that margin.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: It’s the combination of various factors. Okay? The sales mix. And if you recall, we made some investments into that segment three years or so back, we added automation, we added capacity. And we also recently made additional investments.

All of that leading to operations that are more productive overall. But in the current geopolitical, what we’ve been able to take advantage of is what we refer to in our official remarks as our strategic global supply chain. We’ve been able in the context of higher prices of bismuth, not to name it, through our various sources of bismuth, the shapes and form, the value adds that we’re at that we’re adding to make the products that we’re sending in high end markets, we’ve been able to to pull the best of all margins we could.

Frederic Tremblay, Financial Analyst, Desjardins: Okay, perfect. And then maybe just lastly on on Azure, you commented on, you know, the the year that that you’re booking business in. Can you talk about pricing and margins and what you’re seeing there? There’s obviously been significant improvements since you acquired the company, but just given the the strong demand, I would imagine that pricing is favorable as well in the new agreements that you’re signing to this day.

Gerard Vajac, President and CEO, 5N Plus Inc.: Yes, indeed. If you look at the new agreement that we’re signing compared to the one we had three, four years ago, it’s totally different. And the reason is the following. The supply and demand is super tight. And the market has been quite disciplined.

Our two main competitors in The US, one of the two announced investment to increase its capacity, but also in a manner where it’s quite gradual. Then I think from a supply side, there’s a lot of discipline and we’re growing based on order. Then if you don’t have the contract, you’re not adding capacity, which definitely helps to maintain and improve the margin.

Frederic Tremblay, Financial Analyst, Desjardins: Great. Thank you and congrats again.

Nicholas Boychak, Financial Analyst, Cormark Securities: Next

Conference Operator: question will be from Michael Glenn at Raymond James. Please go ahead, Michael.

Michael Glenn, Financial Analyst, Raymond James: Hey, good morning. So just the first question. So look, if I look at your back half guidance, you’re effectively pointing to a 50% decline in EBITDA relative to the front half of the year at the midpoint of the second half implied guide on EBITDA? Is it realistic to think that your EBITDA will decline that much in the back half of the year versus the first half?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: We’re going to have a great H2, but we expect it to be lower than H1 for various reasons on the performance materials as we’ve been been saying, I would say eight years out of 10, most often the volume is down because of the type of industries and clients we are addressing, we’re more cautious about their year end balance sheet. And then in the case of specialty semiconductors, obviously volume is up. But we can foresee at this point in time without exact numbers that operating costs will be higher. So again, we’re going to have two great quarters ahead, but slightly lower than the than the first. And so the extent of which is always difficult to assess with precision.

Michael Glenn, Financial Analyst, Raymond James: Okay. And then just to go back to the first solar, is the volume I I know you’re saying a lot of you’re commenting a lot of it, but is the volume we should see in the back half of the year consistent with the first solar volume that we saw in the front half of the year?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: It should because essentially for solar every unit of product we could produce, they took it in the first half. It’s not like it’s been it’s been pace with a lot more in the second half than the first half. So going forward, it should be similar level or slightly higher. And then as always, there’s always that tricky cut off part when you reach the the holiday period towards the end that may play, but the volume will be superb in the second half.

Michael Glenn, Financial Analyst, Raymond James: Okay. And then one of the comments was towards 2026, like in M and A, maybe having motivated to enter 2026 with an acquisition. Can you just maybe are you getting closer on the type of business you would like to acquire? Or like just maybe additional information on what’s happening with your M and A conversations? We

Richard Perron, Chief Financial Officer, 5N Plus Inc.: have a shortlist of companies that we’re spending a fair bit of time to better understand the operations of the market and assess the fit with 5N Plus. So that’s where we’re at and more entertaining exchange, but at this point in time, it’s still getting familiar with the markets, the operations and how it fits into the 5N Plus story.

Gerard Vajac, President and CEO, 5N Plus Inc.: And again, you know, we’re not looking for an acquisition, we’re looking for a successful acquisition, like I do. Then I think the mantra and the mindset is really we’re super focused on that.

Michael Glenn, Financial Analyst, Raymond James: Okay. Thank you for taking the questions.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Thank

Conference Operator: you. Next question will be from Amir Azad at Ventum Capital Markets. Please go ahead, Amir.

Amir Azad, Financial Analyst, Ventum Capital Markets: Good morning and congrats. Thanks, Amir. Hate to ask again, but just for an abundance of clarity on the volumes. Obviously, where it becomes difficult is you have like all of the spot purchases. So from what you guys said in the Q and A, Q2 results already reflect that run rate that we should have for the rest of 2025.

I think we all understand that. But then for 2026, I heard or I thought I understood that we get a bit of an uptick relative to 2025. Did I misunderstand? Or is that correct?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: It is correct. Yep. ’26 will have more volume than ’25. And that is true renewable that is true for renewable and space. Yep.

Amir Azad, Financial Analyst, Ventum Capital Markets: Yeah. Let’s just yeah. For space, I I understand then. So for renewable, how do I think how much of an uptick do we have in 2026 relative to 2025? Are you guys, like, comfortable sharing that?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: It’s an important uptick. It’s in the it’s in the 35 to 45%.

Amir Azad, Financial Analyst, Ventum Capital Markets: Okay. Because when you guys, like, say 33% for 2025, twenty twenty twenty six

Richard Perron, Chief Financial Officer, 5N Plus Inc.: That’s the combination of the two years.

Gerard Vajac, President and CEO, 5N Plus Inc.: Yep.

Amir Azad, Financial Analyst, Ventum Capital Markets: Okay. Okay. Understood. Then for 2728, we layer another 25% on top of that.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: And then the 25% over 2526. Yep. On top of that.

Amir Azad, Financial Analyst, Ventum Capital Markets: Okay. Perfect. Okay. I think that was very clear. The expanded agreements includes, like, CDSC beginning 2026, which we haven’t discussed, like, too too much in past calls.

Number one, is the is that in addition to the 33% of increased volumes for CBTE?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: It is, sir. Yep.

Amir Azad, Financial Analyst, Ventum Capital Markets: Fantastic. Can you guys, like, quantify for us, you know, like that volume number one? Then if you could elaborate on how CDSC fits into your product and manufacturing roadmap relative to CDTE. I do understand for First Solar, it’s complementary to CDTE within the same sort of module architecture. But I just wonder how does it sort of impact your production processes and requirements and maybe thoughts on the margin profile over time for CDSE relative to CVT?

Richard Perron, Chief Financial Officer, 5N Plus Inc.: From a manufacturing perspective, it is very similar in terms of equipment and processes, but it will need to be manufactured in a separate room to avoid obviously contamination. Okay, but the processes and the type of equipment, all that works out in a similar fashion to CDT where we build our own reactors and so on and so forth. And the chemistry has a lot of similarities by default the processes to make it. From a margin perspective, it is also pretty similar.

Gerard Vajac, President and CEO, 5N Plus Inc.: Yeah. And in terms of quantity, layer of CDE C, it’s much thinner than the layer of CDT, less quantity.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Yeah, volume wise, it’s not at all to the the magnitude of of CDP because they use a much thinner much thinner layer. But it’s a it’s a super interesting niche It’s a nice add on.

Gerard Vajac, President and CEO, 5N Plus Inc.: Yeah. High value add and technology pretty similar.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: It

Conference Operator: appears that his line disconnected.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Okay. Phew. It’s not ours. And

Conference Operator: at this time, gentlemen, it appears that we have no other questions registered. Please proceed.

Richard Perron, Chief Financial Officer, 5N Plus Inc.: Okay. Well, we would like to thank you all for joining us this morning, and have a great day. Yep. Thanks.

Conference Operator: Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time we ask that you please disconnect your lines.

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